To me, this is the kind of balls-out crazy-genius move that keeps me loving my job, but I know that a lot of my friends don’t get why I’ve been laughing all day. So let’s talk about how we got here.

Aereo’s day in court

Two weeks ago in ABC v. Aereo, the Supreme Court handed Aereo a nasty 6-3 defeat. The Supreme Court’s decision was a strange one, though — it didn’t have a very clear holding, other than that the Justices really thought that Aereo looked awfully like a cable system, and seemed to be very unhappy with the fact that neither Aereo nor the TV networks suing it wanted to call Aereo a cable system.

But there was something else going on in that case…something really important. Scalia called it out in his excellent dissent: the majority seemed to think Aereo was doing something shady, exploiting a loophole, and for that reason it needed to be squashed. This is extremely important, but we need to figure out why first.

Story time!

Okay. So why isn’t Aereo a cable system? More importantly, what exactly was it that Aereo did that upset the Supreme Court majority?

(Side note: No one has ever written a better, more thorough recap of all the crazy twists and turns the law has taken, and the confusing, screwed up precedents it has created, than Professor James Grimmelmann in his excellent ArsTechnica article, Why Johnny can’t stream. Go read it. I’m not going to go into that much detail.)

Let’s start easy. An unlicensed public performance infringes copyright. So we know that you need a license to broadcast songs on the radio. You need a license to show movies in a theater. You don’t need a license to listen to songs, nor do you need one to watch a movie. When it comes to cable TV, things get complicated (because the viewer might be involved in the transmission). If a work is transmitted by any device or process, and the public receives it (and the public may receive it either in the same place or in separate places, and at the same time or at different times), it needs to be licensed. So now the question becomes whether or not the public is receiving it. You’ll be amazed at how hard a question that can be.

Long, long ago, video stores (both the family-friendly and adult kind) tried to figure this out. They tried to offer a service where they offered private theater rooms, and patrons could rent a video, go into a room, and watch a video in peace. A court ruled that that was actually a public performance…because once the movie was done, it went back into the store’s library, and could be watched by someone else. The same copy was shown to each member of the public at different times, so it was ultimately performed to the public.

Well, back up a second. Let’s talk about videos to begin with: the mighty VCR. When VCRs were invented, TV networks sued because clearly people would be using them to infringe. But the Supreme Court said that VCRs were fine, because they were “capable of substantial noninfringing uses.” One of those noninfringing uses was “time-shifting,” or recording live TV to store or play back at a more convenient time. The Court also found that playing recorded content in your home was a private performance, so that was also noninfringing. That decision is why we have technology like VCRs, and DVDs, and so on. Thanks, Supreme Court!

Okay. But what about DVRs? DVRs have mostly been under the VCR rule, but then Cablevision made a DVR that wasn’t at the viewer’s home. It was at Cablevision’s facility. Users could select which program they wanted to record, and it would make a unique stored copy for the user, and delete it when the user was done. That’s important, because when the TV networks sued (and they did), the court held that these unique copies, played just for an individual viewer, weren’t public performances. They were private. You couldn’t aggregate them together.

Why does that matter? Because remember what I said about video stores? They couldn’t show the same copy to the public. But unique copies for each individual? That was fine.

Aereo’s solution

Okay, so now we know what is allowed and what isn’t allowed, right?

Not allowed:

Re-broadcasting the same copy of a work to multiple people

Allowed:

Private, home viewing of TV shows

Individual copies of TV shows

Centralized technology that allows streaming of those individual copies of TV shows to private home viewers

With that complex road map of copyright precedents set out, Aereo built a business model that…created a centralized technology that allowed streaming of individual copies of TV shows to private home viewers.

And the Supreme Court got mad because they thought that Aereo was exploiting loopholes in the law.

Fair enough: obviously it was…because the law was poorly written, was written forty years ago, and doesn’t take into account changes in technology. Lower courts have created badly-written, loophole-filled precedents as they’ve tried to cope with shifting technologies in the intervening decades. As Scalia’s dissent pointed out, the right thing to do in this case wasn’t to create another badly written, loophole-filled precedent. The right thing to do was to ask Congress to fix the law.

In the wake of the Court

Many of my colleagues in internet and technology law have written excellent articles about what the Supreme Court’s decision in Aereo may mean for technology. I don’t think the Aereo decision necessarily harms current technology directly. I do, however, think the Aereo decision is very dangerous, because it tells technology innovators and disruptive start-ups (you know: you guys, my friends and clients) that if they work hard to obey the law, and step astutely into the gaps created by new technology and old statutes, they’re going to be seen as thieves and criminals. It sends the message to new geniuses that they shouldn’t try to enter the market in a clever way, because the law will assume that their attention to precedent means they’re trying to cheat. And I think that is devastating.

That, more than anything, is why I have been laughing all day at Aereo’s letter to Judge Nathan. Aereo isn’t dead yet. It’s still innovating. It’s still finding clever new moves, and smart ways to hack the law.